SIE practice questionmediumCommon Stock
Which of the following statements about common stock is correct?
- AIt is paid before preferred stock in liquidation
- BIt guarantees fixed dividend payments
- CIt has the greatest potential for capital appreciation✓ Correct answer
- DIt is exempt from market risk
Explanation
Why C — It has the greatest potential for capital appreciation
Common stock offers the most capital growth potential, but no fixed dividends or priority. It is still exposed to market risk.
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